Digital Economy: Impacts, Influences and Challenges 2005 phần 3 docx

Risk and Investment in the Global Telecommunications Industry 59 Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. development planner who can then use a portfolio approach in which high-risk invest- ments are combined with low-risk investments to promote an investment in a developing country’s telecommunications industry. Provided a developing or emerging economy can offer attractive risk and return characteristics to investors of financial capital, funds from portfolio investment should not be overlooked as a source of financial investment capital. Acknowledgments We thank an anonymous reviewer and the editor for helpful comments. References Alexander, C. (2001). Market Models: A Guide to Financial Data Analysis. New York: John Wiley & Sons. Bernstein, P. (1998). Against the Gods: The Remarkable Story of Risk. New York: John Wiley & Sons. Bortolotti, B., D’Souza, J., Fantini, M. and Megginson W. (2002). Privatization and the sources of performance improvement in the global telecommunications industry. Telecommunications Policy, 26, 243-268. Brealey, R. and Myers, S. (2003). Principles of Corporate Finance (7th ed.). New York: McGraw Hill. Campbell, J.Y., Low, A.W. and Mackinlay, A.C. (1997). The Econometrics of Financial Markets. Princeton: Princeton University Press. Chong, A. and Micco, A. (2003). The internet and the ability to innovate in Latin America. Emerging Markets Review, 4, 53-72. Dembo, R.C. and Freeman, A. (2001). The rules of risk. New York: Wiley. The Economist. (1999). Survey: Telecommunications, the world in your pocket. October 19, 1999. The Economist. (2001). Survey: Global equity markets. May 5, 2001. Estrada, J. (2000). The cost of equity in emerging markets: A downside risk approach. Emerging Markets Quarterly, 4(3), 19-30. Estrada, J. (2002). Systematic risk in emerging markets: the D-CAPM. Emerging Markets Review, 3, 365-379. Fama, E.F. and French, K.R. (1997). Industry costs of equity. Journal of Financial Economics, 43, 153-193. Harvey, C. R. (2000). Drivers of expected returns in international markets. Emerging Markets Quarterly, 4(3), 32-48. TLFeBOOK 60 Henriques & Sadorsky Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Helliwell, F.F. (2002). Globalization and Well Being. Vancouver: University of British Columbia Press. Iyer, L., Tarube, L. and Raquet, J. (2002). Global e-commerce: Rationale, digital divide, and strategies to bridge the divide. Journal of Global Information Technology Man- agement, 5(1), 43-68. Jain, R. (2002). The internet in developing countries. Journal of Global Information Technology Management, 5(1), 1-3. JP Morgan/Reuters. (1996). RiskMetrics Technical Document. Retrieved from the World Wide Web: www.jpmorgan.com. Landes, D.S. (1998). The Wealth and Poverty of Nations: Why some are so rich and some so poor. New York: Norton. Lu, M. (2001). Digital divide in developing countries. Journal of Global Information Technology Management, 4(3), 1-4. Markowitz, H. (1959). Portfolio Selection: Efficient Diversification of Investments. New York: John Wiley & Sons. Miles, D. and Scott, A. (2002). Macroeconomics: Understanding the Wealth of Nations. New York: John Wiley & Sons. Nawrocki, D. (1999, Fall). A brief history of downside risk measures. The Journal of Investing, 9-25. Pettit, J., Gulic, I. and Park, A. (2001). The equity risk measurement handbook. EVAluation, 3(3). Retrieved from the World Wide Web: www.eva.com. Ramsey, J. (1969). Tests for specification errors in classical linear least squares regres- sion analysis. Journal of the Royal Statistical Society B, 31, 350-371. Roy, A.D. (1952). Safety first and the holding of assets. Econometrica, 20(3), 431-449. Sadorsky, P. (2003). Equity risk in the global information technology industry. Interna- tional Research Foundation for Development, World Forum on the Information Society, Virtual Conference 1, Feb. 17 - 28 2003. Retrieved from the World Wide Web: www.irfd.org\events\wf2003/vc.html. Sadorsky, P. and Henriques, I. (2003). Risk measures and the cost of equity in the new economy biotechnology industry. Global Business and Economics Review, 5(1), 37-55. Shapiro, A.C. (2003). Multinational Financial Management (7th ed.). New York: John Wiley & Sons. Sortino, F. and Satchell, S. (2001). Managing downside risk in financial markets. New York: Butterworth-Heinemann Finance. Tully, S. (2003, June). Can stocks defy gravity? Fortune, 147(12), 44-50. White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48, 817-838. TLFeBOOK Risk and Investment in the Global Telecommunications Industry 61 Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Appendix The risk measures (RM) and associated cost of equity (CE) are calculated as follows: RM SR = β i / β M = β i CE SR,i = R f + (RP M ) β i (A1) RM TR = σ i / σ M CE TR,i = R f + (RP w ) σ i / σ M (A2) RM DRj = Σ ji / Σ jM , j = µ, 0, f CE DRj,i = R f + (RP M ) Σ ji / Σ jM (A3) RM VAR = VAR i /VAR M CE VAR,i = R f + (RP M ) VAR i /VAR M (A4) RM DBj = β ji / β jM = β ji j = f, 0 CE DB,ji = R f + (RP M ) β ji (A5) RM REG J = REG ji / REG jM j = f, 0 CE REG,ji = R f + (RP M ) REG ij /REG Mj (A6) TLFeBOOK 62 Pfahler & Grebe Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Chapter IV Reduction of Transaction Costs by Using Electronic Commerce in Financial Services: An Institutional and Empirical Approach Thomas Pfahler University of Bayreuth, Germany Kai M. Grebe University of Bayreuth, Germany Abstract This chapter introduces the Transaction Cost Approach as a means of analyzing specific transactions in financial services by using the theoretical framework of New Institutional Economics. It argues that transaction costs can be assessed and used to compare different business processes. Furthermore, these costs allow a detailed explanation why certain underlying technologies which form the basis for transactions become widely accepted whereas others do not prevail. The authors emphasize the TLFeBOOK Reduction of Transaction Costs by Using E-Commerce in Financial Services 63 Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. relevance of this approach and its application to the field of electronic commerce both on a theoretical and practical level to document and to interpret current trends in this sector on the one hand, and to predict future developments on the other hand. Introduction The authors analyse the impact of the increasing utilization of information and commu- nication technology (ICT) and electronic commerce on the coordination of specific transactions in financial services. In particular, two business processes commonly occurring in the contractual relationship between a financial institution and its customers will be considered: bank transfers and stock purchases. The chapter focuses explicitly on the relationship between a bank and its customers which, in contrast to internal and inter-bank processes that have already been subject of intensive research, has been neglected so far. The basic principles of New Institutional Economics and the instruments developed in the context of the Transaction Cost Approach serve as theoretical background for the study and further discussion. The chapter develops and implements a proposal how to exemplify and to compare these processes under the varying influence of certain technologies. Therefore, a cost model is developed that will be used in the following to assess two basic transactions in this specific area. The intention is to reveal the basic phenomenon and to document the reasons for the current utilization of ICT in this sector by emphasizing relative reductions of transaction costs by means of electronic com- merce. The basic statements and conclusions are underlined and illustrated for Germany in an empirical section. At the end of the chapter, future perspectives and impacts on the chosen topic will be given and derived. Electronic Commerce The need to explain the most important terms and definitions in this context arises directly from the topic chosen. Choi/Stahl/Winston (1997) define electronic commerce as “a new market offering a new type of commodity, such as digital products through digital processes.” This specification already indicates the potential scope and the enormous consequences which result from the use of electronic commerce. More fundamentally, electronic commerce can be seen as any economic activity on the basis of electronic connections (Picot/Reichwald/Wigand, 2001). Hence, it follows that the underlying technology is crucial to promote the acceptance and the use of electronic commerce. The use of digital lines and early devices to generate and to exchange information between participants in the economic cycle was a first step. The introduction of telephone and telefax services can be seen as the advent of a massive development which turns out to be the “digital revolution.” Phone lines can be used to connect TLFeBOOK 64 Pfahler & Grebe Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. computers to the Internet, and digital data highways have been implemented to overcome limitations and to assure rapid processing. Mobile phones or Personal Digital Assistants (PDA) enable users to interact and to participate in new as well as in established markets from almost anywhere at any time. Electronic commerce can generally take place between two businesses, between a business and an administration, or between a business and a consumer. In the following, only the relationship between a business and its customers will be investigated. The object of the analysis is the financial sector. Financial institutions hold special positions in the business cycle and differ in many ways from other corporations or firms. Economically, they perform the functions of liquidity equalization, of processing information and of conducting several transformations. Special laws and directives are applied and the services offered are abstract and immaterial (Büschgen, 1998). Moreover, these services need explanations and need to integrate an external factor: the bank customer. In view of these facts it seems evident that the financial sector is likely to be more affected by the emergence of new technologies than other sectors might be. Consequently, banks have internally been using information and communication technologies for a long time to process a large number of highly standardized operations. In the last few years, especially the core business of banks has been at the center of attention—and it has changed in several ways. The interface between the institution and its customers has become increasingly important. New ways of contacting and transacting have been implemented for mutual benefit and changed their relationship. Customers are now much more integrated in the transaction process and may easily arrange their affairs through the use of electronic commerce without having to be on site. Banks will be able to reengineer business processes, offer new products and reduce personnel costs. New Institutional Economics There are many possible approaches to investigate different aspects of information and communication technology and electronic commerce. This chapter chooses the perspec- tive of New Institutional Economics, more precisely the Transaction Cost Approach, which has been developed since the 1950s because of certain deficits in the Neoclassical Theory. The criticism leveled is that the use of a market or of the legal system is neither free nor without frictions (Williamson, 1990). On the contrary, institutions have to be taken into account and transaction costs arise. Ostrom (1990, p.51) states as follows: “Institutions” can be defined as the sets of working rules that are used to determine who is eligible to make decisions in some area, what actions are allowed or constrained, what aggregation rules will be used, what procedures must be followed, what information must or must not be provided, and what payoffs will be assigned to individuals dependent on their actions. TLFeBOOK Reduction of Transaction Costs by Using E-Commerce in Financial Services 65 Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Transactions The basis of the Transaction Cost Approach was established by Coase in 1937, who questioned the reason for the existence of firms. He concludes that, “there is a cost of using the price mechanism” during the transactional process between individuals. The term “transaction” was introduced into the economic context by Commons (1990, p.58), who reasoned: Transactions [ ] are not the “exchange of commodities,” in the physical sense of “delivery,” they are the alienation and acquisition, between individuals, of the rights of future ownership of physical things, as determined by collective working rules of society. Other authors do not limit the relevance to property rights. Williamson (1985, p.1) claims that a transaction “occurs when a good or a service is transferred across a technologically separable interface.” This definition will be the basis for all further discussion in this context. Many differing points of view can be found, but there is at least agreement that transactions are not free. Transaction Costs Arrow (1969, p.48) defines these specific costs in a very general way and found that transaction costs are “costs of running the economic system,” whereas Williamson (1989, p.142) considers them as the costs of “planning, adapting, and monitoring task completion under alternative governance structures.” This latter explanation is the basis for the development of the cost model and will be referred to later on when two transactions are compared which are accomplished in various ways. Transaction costs may occur in markets, within firms and corporations or in the political framework (Richter/Furubotn, 1996). They may be fixed costs or variable costs. During the transactional process, transaction costs are generated before, during and after the actual transaction takes place (Coase, 1937). For example, costs of gathering information, costs of preparing the transaction, costs of monitoring or contracting costs can be distinguished in the different phases of a transaction. The specific amount of the transaction costs accruing varies, and depends for example on the specificity of a necessary investment in this transaction, on the frequency of occurrence or the uncertainty in respect to environmental factors or the contractual partner. In the context of all further investigations, uncertainty and opportunism can be excluded because the analysis considers the contractual relationship between a financial institution and its customers. TLFeBOOK 66 Pfahler & Grebe Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Quantification of Transaction Costs After transaction costs have been identified and introduced as a new cost category, the question is how to measure these costs and how to use them for economic analysis. Different approaches can be found, for example from a macroeconomic or microeconomic perspective. In addition, many case studies focus on certain markets or specific aspects in or between corporations. One of the most famous studies is the analysis of the development and importance of transaction costs for the United States over a period of 100 years by North and Wallis (1986, p.97). For them, transaction costs “are the costs associated with making ex- changes, the costs of performing the transaction function.” All economic activities are divided into activities which mainly transform input into output and those which are basically involved in coordination and transaction processes. North and Wallis (1986) demonstrate an increase of transaction costs of the whole transaction sector from 26.1% to 54.7% of GDP between 1870 and 1970 and conclude that transaction costs are as important as production costs in highly industrialised nations. Demsetz (1968, p.35) focuses on the New York Stock Exchange (NYSE) and defines transaction costs as “the cost of exchanging ownership titles.” He points out that these costs decrease with an increasing trade volume and thus explains the concentration processes at the NYSE. Criticism The most serious problem of the Transaction Cost Approach is the lack of a consistent terminology. Even for a basic term like transaction costs there is disagreement about its components, determinants and applicability for certain issues. Moreover, Niehans (1987) points out that transaction costs “become difficult, perhaps impossible, to quantify.” This lack of transparency is evident and basically the criticism is justified. But as the Theory of New Institutional Economics and the Transaction Cost Approach are compara- tively young disciplines in economic science, a fairly standardised terminology will probably be developed in the future. Undoubtedly, transaction costs are relevant in industrial nations and make up an increasing part of all costs caused by economic activity. Last but not least, it is important to note that there is no imperative to measure transaction costs absolutely or in a direct way. The approach developed in the next section will link the Transaction Cost Theory to a specific subarea of Electronic Commerce in Financial Services. The Cost Model The preceding sections have developed the conceptual framework for the target analysis by defining the most important terms and by explaining the basic ideas. Now our own TLFeBOOK Reduction of Transaction Costs by Using E-Commerce in Financial Services 67 Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. proposal to measure transaction costs will be introduced. We refrain from attempting to quantify these costs in absolute terms but concentrate deliberately on relative consid- erations. As the focus in this context is on the relevant interface between a bank and its customers, internal and inter-bank transactions will be left out of consideration. Our approach describes and illustrates a new way to combine the business perspective of a financial institution and the personal perspective of a customer. As business modularity can hardly be used to extend internal processes and to bridge the contrast between both perspectives, the given theoretical framework used in Banking and Finance is insufficient for the very specific investigation in this chapter: Only monetary factors have been considered so far. This new approach includes monetary as well as non-monetary factors, which are both covered by the underlying notion of transaction costs. The latter can actually be more important and they may represent the major proportion of all the costs that arise. Therefore, a relatively new framework to measure transaction costs has to be developed. Phases of a Transaction In a first step, the transaction will be subdivided and classified into different phases according to their evolution over the period under observation (Picot, 1982). Seven steps can be well-defined: Before a transaction can take place, certain preparations have to be made. To initiate a bank transfer or a stock purchase, all necessary information has to be collected. This phase is called “information seeking.” Afterwards, the form has to be completed (“preparation”) by the customer. All details have to be checked (“review”) before the instructions are forwarded (“transmission”) from the customer to the financial institution. The latter has to verify the given data (“inspection”) and starts processing the task. Subsequently, an order confirmation is generated and transmitted back to the customer (“confirma- tion”). The transaction is terminated when the customer has received this piece of information and checked all of the particulars (“final checkup”) (p.270). Modes of Coordination The model differentiates between seven modes of coordination. Each transaction can be arranged in a traditional way by visiting a bank. Another possibility offered by most European commercial banks is to send in a request by mail. Using a telephone to transmit the required information, utilizing facsimile communication or interactive video-text services are additional options. As a result of extensive technological progress, online processing and mobile processing of transactions via the Internet is commonly used nowadays. TLFeBOOK 68 Pfahler & Grebe Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Traditionally, a customer visits his bank during its office hours from time to time. He has to leave his home to get there, and typing errors may occur while completing the form manually. If he has to queue at the counter before it is his turn, the transaction may be very time-consuming. The confirmation of the order completion will be received at the next visit to the bank. A second alternative would be to post the order form by mail. Even though there is still no device to protect a customer from typos, informal language and errors, there is no need for him to go to his bank (which may be located far away) at a certain time: The next postbox will do. A confirmation of the order completion will also be received by mail several days later. By accomplishing a transaction via telephone it is not necessary for a bank customer to leave his home anymore. Although it may be more difficult to collect all information and to prepare the order, the transmission itself and the generation of the order confirmation is partially automated and comparatively fast. Telephone circuits can be used to transmit facsimiles and to receive information via faxback, too. Most European banks offer or have offered this option for certain groups of customers. No matter whether the order form is drawn up manually or by using a computer, the bank has to review all instructions and enter them into the system. BTX is the German version of interactive video-text. With regard to the stock market, it is possible to receive and realize up-to-date market prices and to interact spontaneously. Other information can be acquired easily and fast in comparison to the media mentioned above, and error messages will occur in the case of typos in the electronic order form. By using a computer with a connection to the Internet, a customer can initiate transac- tions at home and is not restricted to office hours any longer. Typos and other errors will usually be reported before the order form is transmitted electronically. The exchange of information takes place instantly, the confirmation of the order completion will be generated and received directly after the acknowledgement on the part of the bank. Most services mentioned in the context of an online transaction are available for mobile devices, too. The crucial advantage is the stand-alone aspect: No other equipment is needed to seek information and to interact rapidly with markets from almost any location at any time. The verbal description of these reflections can be transformed into a qualitative ranking on an ordinal scale. The matrix (Table 1) summarizes the potential relative reduction of transaction costs and illustrates which technology has the largest impact on the process described. Table 1. Simple matrix for the phases in the transaction process and the mode of accomplishment No. Phase Manual Mail Phone Fax BTX Online Mobile 1. Information Seeking 0 0 0 0 + + + + + + + + + + + + 2. Preparation 0 0 - - 0 + + + + + + + + + 3. Review 0 0 + 0 + + + + + + + + + + + + 4. Transmission 0 + + + + ++ + + + + + + + + + + + + + 5. Inspection 0 0 + 0 + + + + + + + + + + + + + + + 6. Confirmation 0 + + + + ++ + + + + + + + + + + + + + 7. Final Checkup 0 0 0 0 0 0 0 TLFeBOOK [...]... 1999 1998 1997 1996 1995 1994 19 93 1992 1991 1990 1989 1988 1987 1986 1985 1984 19 83 1982 1981 1980 2,696 2,912 3, 168 3, 404 3, 578 3, 675 3, 785 3, 872 4, 038 4,191 4,451 4,711 4,297 4,429 4,5 43 4,662 4, 739 4,798 4,848 4, 930 5,052 5 ,35 5 1,880 1,777 1,725 1,687 1,620 1,5 93 1,570 1,548 1, 530 1, 533 1,617 1, 433 1,400 1 ,38 5 1 ,37 5 1 ,36 8 1 ,36 5 1 ,36 7 1 ,37 4 1 ,37 4 1 ,37 5 n.a Copyright © 2005, Idea Group Inc Copying or... 1998 1997 1996 1995 1994 19 93 1992 1991 1990 1989 1988 1987 1986 1985 1984 19 83 1982 1981 1980 50,220,000 48 ,30 0,000 46, 530 ,000 45,200,000 44,200,000 42,000,000 39 ,900,000 37 ,500,000 35 ,800,000 33 ,700,000 32 ,000,000 28,847,800 27,8 23, 200 27,007,100 26,189 ,30 0 25 ,39 1,800 24,420,600 23, 385,600 22,571,600 21,645,900 20, 535 ,000 61 59 57 55 54 51 49 46 44 42 40 37 36 35 34 33 31 30 29 28 26 Table 7 Number... Transmission Inspection Confirmation Final Checkup 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 -1 1 3 1 3 0 0 -1 0 2 0 2 0 3 0 3 4 5 4 0 4 5 4 4 5 4 0 5 4 5 5 5 5 0 20% 5% 5% 30 % 5% 30 % 5% I Sum (AV) 0.00 0.60 1.85 1.15 3. 40 3. 90 4.70 II Potential Relative Reduction of TAC 0% 13% 39 % 24% 72% 83% 100% For instance, information seeking and a rapid transmission to the financial institution involved as well as a quick confirmation... 1995 34 ,33 2,000 25,194,000 20,586,000 18 ,30 4,000 17,0 63, 000 16 ,30 3,000 Copyright © 2005, Idea Group Inc Copying or distributing in print or electronic forms without written permission of Idea Group Inc is prohibited TLFeBOOK 84 Kurihara Chapter V The Spreading Use of Digital Cash and Its Problems Yutaka Kurihara Aichi University, Japan Abstract It has been several years since the words digital cash” and. .. changing a deposit into cash, and the cash demand are positively correlated If I apply this theory, then it follows that digital cash decreases the cash demand However, it is true that liquidity will rise, so digital cash has the possibility of making the overall cash demand unstable The influence of digital cash was considered from the cash-supply side and from the demand side in a) and b) of this section... 1994 19 93 1992 1991 30 ,000,000 24,000,000 14,400,000 8,100,000 5,500,000 2,500,000 1,500,000 750,000 37 5,000 35 0,000 200,000 36 .5 29.2 17.6 9.9 6.7 3. 1 1.8 0.9 0.5 0.4 0 .3 Table 9 Mobile Phones per 100 Inhabitants in Germany (From Eurostat, 2002, Database NEW CRONOS, Table TEL4) Year Mobile Phones per 100 Inhabitants in Germany 2000 1999 1998 1997 1996 1995 1994 19 93 1992 1991 59 29 17 10 7 5 3 2 1 1... 2001 2000 1999 1998 1997 1996 1995 1994 19 93 1992 1991 1990 Number of Personal Number of Personal Computers Computers in Germany per 100 Inhabitants in Germany 29,000,000 27,640,000 24,400,000 22,900,000 19,600,000 17,100,000 14,600,000 12 ,30 0,000 10,200,000 8,800,000 7,500,000 6,500,000 35 .3 33. 6 29.7 27.9 23. 9 20.9 17.9 15.1 12.6 11 9.4 8.2 Copyright © 2005, Idea Group Inc Copying or distributing... specifies the definition of digital cash, including a new payment instrument, the debit card Section 3 investigates the advantages and the disadvantages of digital cash Here I will address the problematic aspects of digital cash that have been clarified through our ongoing experiments and that are observable in society at large Section 4 considers the connection between digital cash and the financial institution... 2000) Such financial tools should not be classified as digital cash, and from the standpoint of monetary policy the distinction is particularly important What I am focusing on here is a form of digital cash that builds information on “pseudocash,” in other words the digital cash itself, into the card and the network, and transacts with it The entity of digital cash has these facets: a) a concluded settlement;... currency deposits Also, digital cash is not under the constraints of the laws governing traditional currency However, our stated examples fit within the realm of the above-mentioned definition and thus should be classified as digital cash Advantages and Disadvantages of Digital Cash In this section, I analyze the advantages and the disadvantages of digital cash Advantages of Digital Cash It is common . of the Royal Statistical Society B, 31 , 35 0 -37 1. Roy, A.D. (1952). Safety first and the holding of assets. Econometrica, 20 (3) , 431 -449. Sadorsky, P. (20 03) . Equity risk in the global information. Seeking 0 0 0 0 3 4 5 20% 2. Preparation 0 0 -1 -1 0 5 4 5% 3. Review 0 0 1 0 3 4 5 5% 4. Transmission 0 1 3 2 4 4 5 30 % 5. Inspection 0 0 1 0 5 5 5 5% 6. Confirmation 0 1 3 2 4 4 5 30 % 7. Final. approach. Emerging Markets Quarterly, 4 (3) , 19 -30 . Estrada, J. (2002). Systematic risk in emerging markets: the D-CAPM. Emerging Markets Review, 3, 36 5 -37 9. Fama, E.F. and French, K.R. (1997). Industry